Did Time Inc. Miss the Paid Content Boat?

Time Inc. was a pioneer at the dawn of the Internet revolution, creating in the '90s the prescient if ultimately ill-fated online portal Pathfinder to host its magazines. But today, it isn’t even keeping pace with its smaller print brethren, and one area in which it has particularly lagged is paid content. While other major magazine publishers as well as newspapers have made advances reversing what the Internet has wrought and getting consumers to pay for digital content, Time Inc. still lags. In the spring of 2011, the company's biggest rivals, Condé Nast and Hearst, made deals to sell subscriptions to their magazines’ tablet editions in Apple’s iTunes store. It took Time Inc. more than a year to follow suit. Hearst, which has trained consumers to pay for digital content from the start, is now selling some 800,000 digital subs, and at an average price that’s twice the introductory price for a print subscription. Condé Nast initially allowed print subscribers to receive digital versions for free but now charges for tablet editions as consumers have shown a willingness to pony up for digital content. Condé Nast averaged 550,000 digital subs in the second half of 2012. Time Inc., which took an All-Access approach, letting print readers add a digital subscription for free, may have held back selling digital-only subscriptions to protect its print business. Now, it ofers single copies, authentication and subscriptions on all major tablet platforms and counts 2 million subscribers who access print and tablet. (The publisher doesn't yet break out digital-only sales.) But with numbers like these coming from other publishers, one wonders if Time Inc. left digital dollars on the table. “Of all the big competitors, all of them have figured out pricing—those companies have seen they can charge more” compared to the “very conservative” Time Inc., said Ken Doctor, media analyst with Outsell. “They plainly lost a year and a half under [CEO] Laura Lang.” Time Inc. titles Time, People and Sports Illustrated are big in online magazine terms but compete with much larger players in the online space—Huffington Post, TMZ, ESPN—as well as smaller niche sites. It will be up to Time Inc.’s next CEO to figure out how push the company's magazine brands forward online and how possibly to wean the company off CNNMoney.com, the business-news juggernaut that’s now the online hub of Fortune and Money. ComScore doesn’t break out Fortune.com but reported that in January, Time.com got 12 percent of its 10.2 million uniques from CNN’s network. For the past three years, Time Inc. has been without consistent leadership that could have kept it in the digital lead, or at least on track with its competition. The company also lost digital talent, including its first chief digital officer Randall Rothenberg, paid content strategist Monica Ray and consumer marketer Steve Sachs. The whole sell behind Lang, the former CEO of Digitas, was that with her digital credibility she would have helped the company secure ad dollars moving out of print. The rank and file have waited for direction, to no avail. Catching up on the digital front will become even more pressing once Time Inc. spins off from Time Warner and comes under the glare of Wall Street’s spotlight. As the magazine industry’s print ad base shrinks, digital revenue still contributes only an estimated 5 percent of total ad revenue. Without the shield of its corporate parent, an independent Time Inc. won’t easily be able to hide the discrepancy. Under Lang, Time Inc. finally got its subscription deal with Apple, introduced some new digital ad products and appointed a new head of video to chase the hot growth areas of content marketing and online video. But it is a safe bet it will be a long time before those efforts pay off.

Performance Marketing

Did Time Inc. Miss the Paid Content Boat?

Publisher lags peers in charging for digital

Lucia Moses

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Lucia Moses